Here is some code that could be added to mouse.el to accomplish this:

---------------------------------------------------------
(defcustom mouse-wheel-distance 10
  "*Number of lines, maximum, to scroll the window when you move the mouse
wheel."
  :type 'integer
  :group 'mouse)

;--------------------------

(defun mouse-wheelscroll-down ()
  " A function to scroll up or down in response to the mouse wheel."
  (interactive)
  (scroll-down
   (min mouse-wheel-distance
        (max 1 (- (window-height)
                  next-screen-context-lines)))))
;--------------------------

(defun mouse-wheelscroll-up ()
  " A function to scroll up or down in response to the mouse wheel."
  (interactive)
  (scroll-up
   (min mouse-wheel-distance
         (max 1 (- (window-height)
                   next-screen-context-lines)))))

(global-set-key [mouse-4] (function mouse-wheelscroll-down))
(global-set-key [mouse-5] (function mouse-wheelscroll-up))
---------------------------------------------------------

Perhaps it would be better to use a scaling factor against (window-height)
rather than an absolute distance for mouse-wheel-distance.